Figure 8-7
The vertical distance between points A and B represents a tax in the market.
-Refer to Figure 8-7.As a result of the tax,buyers effectively pay
A)$32 for each unit of the good,and sellers effectively receive $24 for each unit of the good.
B)$32 for each unit of the good,and sellers effectively receive $16 for each unit of the good.
C)$24 for each unit of the good,and sellers effectively receive $16 for each unit of the good.
D)$28 for each unit of the good,and sellers effectively receive $20 for each unit of the good.

Question

Figure 8-7
The vertical distance between points A and B represents a tax in the market. 
-Refer to Figure 8-7.As a result of the tax,buyers effectively pay
A)$32 for each unit of the good,and sellers effectively receive $24 for each unit of the good. 
B)$32 for each unit of the good,and sellers effectively receive $16 for each unit of the good. 
C)$24 for each unit of the good,and sellers effectively receive $16 for each unit of the good. 
D)$28 for each unit of the good,and sellers effectively receive $20 for each unit of the good.

Quizplus · Accepted Answer

The vertical distance between points A and B represents the amount of tax in the market, which is $8. Therefore, buyers effectively pay the original price of $24 (point A) plus the tax of $8, which equals $32. Sellers effectively receive the original price of $24 minus the tax of $8, which equals $16 (point B). Therefore, the correct answer is B.

Figure 8-7 the Vertical Distance Between Points a and B Represents a Represents